Sunday, June 23, 2013

Sir Very Clownley, ably flanked by Dodger Button with Hob Carker bringing up the rear of the entourage, today swept into town to announce the imminent construction of the VOSCO-WalPart-QuantityBins-Yakuza-BurstRail International Convention, Gambling and Pleasure Centre.

'We are pleased to have been able to secure the services of this prestigious international cartel, for our fair city', Sir Very said by way of introduction.

'Not only are we going to enjoy the patronage of a vast number of international gamblers, convention-chasers, organisers, and 1-percenters, but we have been able to negotiate a number of additional benefits.'

' For a miniscule 10% of the facility's turnover, the Yakuza-BurstRail part of the consortium will push through an Airport-CBD light rail system which will incorporate the much-talked-about University-to-CBD link'.

'So, not only will international playaz be able to whizz in and out, as it were, but the fine young students of our esteemed Halls of Learning will be able to partake of the multitudinous delights of this facility, and perhaps to pay off part of their vertiginous student debts via a flutter on the tables, or of course by taking up one of the many employment opportunities offered. Waitpersons, croupiers, security, IT, chefs, drivers and many other menial if not actually horizontal positions are envisaged.'

'The bulldozers for this rail extension are due to start Thursday next week, so if you are a Fendaltonian, and the house next door suddenly crumbles before the onslaught of a large yellow machine, you'll know what's going on. It's called ConsultationLite.'

'The rates, employment, choo-choos and general ambience offered by this proposal were simply too good to walk away from.'

I'm a conservative in most matters now - markets work - why supplant them?

But we don't and never have had a 'free market' - it's always been a Mixed/Hybrid beast, and the early religious restraints and latterly Gubmint codes and regulation, are needed to keep everyone honest. Ish.

Markets work just fine and have done since the dawn of trading around 4000 years ago: they are nothing but a switchboard between people with something to sell (like the copper miners at Great Orme in North Wales) and other people with something to sell (the traders from the Mediterranean who travelled all the way up there with foodstuffs in amphorae), the former lacking what the latter have in surplus and vicky verser.

A massive plus in markets (gentle commerce, in Adam Smith's phrase, recycled by Pinker in ''Better Angels') is that they innately if slowly build mutual trust and kick off a Civilising Process. We're at the far end of that now (see below, it is possible to discern a De-civilisng process at work in our fair land...) so all this progress is somewhat taken for granted. But the main alternative, which tends to be control by a (male, quelle surprise) elite, by fear, violence, repression and tyranny, has been the default setting for most of modern humanity's (last 50K years) history. And it is frighteningly easy to push that 'Factory Reset' button: PNG being a current example.

Culture has almost everything to do with everything, as any competent manager will attest. A common case-study in MBA-land is the new manager, determined to change culture in a business, firing, fairly much randomly, 10-20% of staff to kick-start the change effort. It puts down this marker: 'Things are gonna Change around here'. But what we have in funky l'il Godzone is a set of two cultures vying for the minds of the young.

There is or was a much older, formerly better-civilised European-derived culture which in its heyday valued adherence to widely held norms, reinforced by a religion that had itself shed most of the excesses yet retained the ability to bind (religare). It valued deferral of reward, hard work, a spiritual journey based on an individual's response to wise books, and a self-introspection that gradually but firmly expanded the circle of empathy, squeezed out excesses like torture-executions, rewarded simple states of being like marriage and the delight in children, and mandated fair dealing and trust in commerce.

But this culture cannot now be said to exhibit much if any of these qualities: viewed from that high point, it can be said to be degenerate, hollowed out, unattractive, and failing.

The other culture is of course indigenous - a communal, pre-literate, tribal culture which has been propelled over 10-15 generations into close and unrelenting contact with the above. Its historic version values Tribe over Other, strength and dominance over compassion, and in general exhibits all the hallmarks of the Factory Default setting which we all came from. For a primer: Nicholas Wade's 'Before the Dawn'.

The mixing has been as one would expect, very patchy. We are left with a decayed and decadent Euro fragment, an abiding and unrelenting distrust of religion or indeed any other dominant binding philosophy, a present-centred mind-set which steeply discounts the future, a Partner culture with distinct tribal reversion tendencies especially at political level, attitudes generally which tend to favour dominance and lack of empathy over the alternatives of gentle commerce and trust, and a financial utter dependence on intensive food production for a newly dominant China, itself flexing international muscle, and approaching carrying capacity in order to do this on our land.

So, 'culture matters', and 'incentives matter'.

Tax only affects the latter, and I somehow do not think that fiddling with IRD codes and deciding whether and how to tax who for what, is gonna tackle the wider issue of Culture - what we do around here.

Now, if only it were as simple as firing 10-20% of the population , to convince the rest that "Things Have Changed'.

Bob Dylan sang:'People are crazy and times are strange,I'm locked in tight, I'm outta range,I used to care, butThings have Changed'

I don't think it's that simple. Especially not on such a small set of islands....

as the first side effect, handing a luvverly CG to a selected lucky few landowners

as the second side effect, watching as that vastly increased land price for undeveloped land instantly transmits itself across all comparable developed land plots in the adjacent market, thus multiplying the initial if localised CG thinly across that entire market.

as the third side effect, handing banks and financiers a vastly increased interest revenue stream, as eager or desperate buyers borrow to buy said plots (existing or new)

effectively lock out new entrants to the housing market

effectively transfer development to the many thousands of lifestyle blocks outside the MUL/RUB or other squiggle on a map

levy fees, contributions and other costs upon any and all attempts to develop the land or densify existing properties

add multiple cost layers to any attempt to develop, densify or otherwise improve properties in a way which attracts a resource consent (a sampling: pre-application consult, require engineers/surveyors/feng shui consultaterations, inject time into processes, impose conditions during the process)

display a breathtaking ignorance of such basic economic fundamentals as supply and demand, or the time value of money